Competitive balance is a persistent purpose of every demand NBA ownership has made in collective bargaining over the past two decades. The most important goal in any bargaining situation for multi-billion dollar enterprises like the NBA is, of course, money. But league officials have consistently insisted that competitive balance is as high a priority.
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The 2011 lockout, for example, has obvious roots in a leaguewide desire to cut costs. That purpose was achieved when players conceded upwards of $280 million per year. But David Stern, Adam Silver and the top negotiating owner, San Antonio’s Peter Holt, also talked about competitive balance at every opportunity ... just as they had back in 1998 and 2005, when bargaining deals had an eye on leveling the playing field.
What is a level playing field? Silver once said every team managed well should have the opportunity to a) make money and b) compete for a title. In more general terms, competitive balance means not having 20 teams with no shot at a title in October. It means that the gap between the worst and best teams isn’t great. Parity is (for better or worse) interchangeable with competitive balance in sporting terms; parity means that teams are more similar than they are different.
You can see why the NBA wants all teams to be competitive every year. Consider that the league's two worst teams this season, the Bucks and Sixers, are at the bottom of the table in paid attendance, each of them under 14,000. Milwaukee's attendance has dropped 10 percent over a quasi-competitive 2012-13 season; it'll be even lower by season's end as the resale market gets flooded with cheap tickets. And gate receipts affects so much else: merchandise sales, sponsorship value, season ticket renewal, suite renewal. All that lost revenue affects the bottom line. So really, competitive balance is about money.
It matters outside the local markets, too. Consider the ratings a potential Thunder-Grizzlies first round West playoff series will draw compared to, say, Pacers-Cavaliers in the East. Blowouts are anathema to everything the NBA wants to represent to the casual sports fan. Competitive balance presents more opportunities for those magical moments that have made the NBA so great. And that has a financial payoff: you get more fans watching that competitive first round instead of sleeping until the conference finals, and you can negotiate higher prices from sponsors and the networks.
So how did the NBA attempt to level the playing field? By hardening the team salary cap. Over the years this included a cap on individual player salaries, the luxury tax system (and further pumping of the penalties associated with the tax), restrictions on the types of contracts high-payroll teams could sign and rules intended to give incumbent teams an advantage in retaining players.
All of those changes in the business end of the NBA since 1998 have been tabbed as competitive balance enhancers. Really, they were cost-cutting measures that had the added benefit of potentially boosting competitive balance. As more teams lurch toward guaranteed profitability, though, the case for parity will be made louder and louder by Silver and his owners. The financial case (which, frankly, was always questionable, no matter what numbers the league conjures up) is pretty close to being solved. That leaves the competitive balance issue. And ownership will want concessions on it. Silver has already been discussing the issue in his first month on the job.
But can the NBA even make a case that its measures to balance the league have done any good? The data does not appear to make the case for the league.
I looked at the standard deviation of teams’ winning percentages in each season since 1999-2000 to see whether the NBA’s competitive balance measures have created more parity. You would think that as the measures are implemented, the parity of the league would increased, shrinking the standard deviation. (Standard deviation shows dispersion from the mean. For example, a division in which teams win 39, 40, 41, 42 and 43 games would have a very low standard deviation. A division in which teams win 20, 25, 41, 57 and 62 games would have a relatively high standard deviation. That first division is way more competitively balanced.)
Here’s the data.
It appeared progress might have been made approaching 2007-08, but that season and the two that followed have the highest standard deviation — the least parity — in the bunch. Last season did see better competitive balance on the whole. This season has, to date, reversed that.
What’s going on here? It could be one or a combination of a few things.
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1. The competitive balance measures aren’t enough. There could be countervailing forces pushing competitive imbalance stronger than the parity-inducing measures. For example, the draft lottery incentive of being horrible.
2. This data doesn’t capture what the competitive balance measures are really doing. It’s conceivable that the competitive balance measures aren’t truly intended to give us a tighter won-loss spread, just a greater opportunity for a low-win team to turn it around quickly. Also, we don’t have team-by-team financial statements that would allow us to determine whether the league is becoming more balanced financially.
3. The competitive balance issue is a Trojan horse to soften the image of the league as it continues to chop into player salary.
Whatever the case, the NBA does not appear to be any closer to competitive balance than it was 15 years ago. That’s a problem for Silver as he prepares to make a case for further changes to the way the teams sign players in 2017.
